Teva trumps Valeant with a $6.8-bn deal to acquire Cephalon

Teva Pharmaceutical Industries Ltd, the world's largest generic drug maker, will acquire specialty pharma company Cephalon in a $6.8 billion deal, trumping a hostile bid by Valeant Pharmaceuticals International Inc.

Under the agreement, approved by the boards of both the companies, Teva will acquire all of the outstanding shares of Cephalon for $81.50 per share in cash, for a total $6.8 billion. The transaction, which has no financing conditions, is expected to be completed in the third quarter of 2011.

The purchase price of $81.50 per share represents a 39-per cent premium to Cephalon's stock price as of 29 March 2011, the day before the announcement of the proposal, and a 44 per cent premium to Cephalon's average closing stock price over the preceding 30 trading days.

The offer is also at a 12-per cent premium to Valeant Pharmaceuticals' unsolicited proposal of $73.00 per share and a premium of 6 per cent to Cephalon's closing stock price on 29 April 2011, the last trading day prior to today's announcement.

The transaction is in line with Teva's strategy of building branded and specialty pharmaceuticals business through diversification and expansion of the company's product portfolio and pipeline, the company said in a release today.

Teva hopes to leverage the complementary commercial, R&D and operational capabilities to produce a broad spectrum of specialty branded products.